Here's The Case For Not Panicking About The Debt Ceiling

We’ve run acoupleofstoriesthis morning about rising panic that Washington will fail to get itself together at the last minute and raise the debt ceiling before Oct. 17.

Our Executive Editor Joe Weisenthal notes: “There is definitely a gap between how Washington people feel about the debt ceiling and how participants in financial markets feel about it. Financial markets think it’s all just noise. Washington types think it could be different this time.”

There is indeed a gap. But I’m with the financial markets on this one. So is Eurasia Group’s U.S. practice head Sean West, who says there is an “extremely low risk” that we hit the debt ceiling. Here’s his reasoning:

As the deadline approaches, the Senate will start to get nervous and pass a clean debt ceiling increase and Boehner will have to decide if he wants to be responsible for default. My strong bet is that he doesn’t — he’s chosen bad deals over no deal on the debt ceiling every time before, and there’s no indication he’s somehow recently warmed to default or playing recklessly on this issue given the potential downside ramifications.

This is right. Boehner knows that hitting the debt ceiling is a political disaster for Republicans. That’s why he backed down on his debt ceiling demands the last time, and the underlying political dynamic hasn’t changed.

Sometimes, Boehner is forced by his caucus’s unreasonableness to court disaster. But most House Republicans will be grateful if Boehner saves them from a debt ceiling crisis, so his speakership won’t be in danger for averting one — even if House Republicans feign outrage over his cutting a deal with Minority Leader Nancy Pelosi to do so.